Qualcomm stock surges on $60B Amazon AI chip deal

Qualcomm and Amazon will co-develop AI chips and optical connectivity for data centers. Amazon gets a warrant for 25M Qualcomm shares. Qualcomm stock rose up to 9.5%.

Qualcomm and Amazon have entered a multi-generational partnership to co-develop custom AI chips for large-scale data centers, focusing on inference workloads. The collaboration also includes the joint creation of advanced optical connectivity solutions, capable of speeds up to 1.6 terabits per second. As part of the agreement, Amazon received a warrant to purchase up to 25 million Qualcomm shares at $161.26 each. This represents a potential investment of $4 billion and is tied to prospective revenues of up to $60 billion. The warrant remains valid through September 2036. Following the announcement, Qualcomm's stock surged between 4% and 9.5%. The deal aims to strengthen Qualcomm's position in the AI data center market and deepen its use of AWS AI infrastructure, while Amazon secures access to custom silicon and connectivity solutions for its cloud operations.